TFSA Passive Income: 3 Incredible Stocks That Earn $1,600/Year!

The TFSA (Tax-Free Savings Account) is a great place to buy stocks to earn passive income. Inside the TFSA, you don’t pay any tax on the income you earn. Your income returns can increase by 10-25% by simply keeping the tax that you would normally owe in a non-registered account.

Likewise, the TFSA is the most flexible registered account when it comes to withdrawals. You could potentially withdraw all your income earned tax-free from the account annually. You would just temporarily lose that TFSA contribution space for the remainder of the year.

If you are wondering how to get started, here’s a $30,000 three-stock portfolio that would collectively earn $1,600 of passive income per year. Here’s how it could work.

Pembina Pipeline: A top TFSA stock for income

You could deploy $10,000 into 190 shares of Pembina Pipeline (TSX: PPL) for around $52.57 per share today. Pembina pays a $0.71 quarterly dividend that equates to a 5.4% yield. This TFSA investment would earn $134.90 quarterly, or $539.60 annually.

Pembina is one of Canada’s leading pipeline and midstream infrastructure firms. Over 85% of its annual income is from contracted sources. As a result, it generates cash flows that support its dividend very consistently. It has a low payout ratio, so its income stream is very safe.

The company has several opportunities to grow at a steady mid-single-digit rate in the coming years. Most notably, it is developing one of only a few approved LNG terminals on the west coast of British Columbia.

Recently, Pembina has pursued a low-single-digit dividend-growth posture. Over time, TFSA investors will enjoy a solid and steadily growing stream of passive income in the coming years.

Mullen: A transport with monthly dividends

Mullen Group (TSX: MTL) is another passive-income stock worth adding to a TFSA. A $10,000 investment could buy 721 shares at a price of $13.86. It pays a monthly dividend of $0.07 per share, which equates to a 6.06% yield. Owning this stock would earn $50.47 per month, or $605.64 annually, inside a TFSA.

Mullen Group is one of Canada’s largest trucking, logistics, and transportation companies. The company has used a growth by acquisition strategy to expand across Canada and the United States. A tough freight environment has impacted recent results and pulled the stock down.

Yet, this could be an opportunity for Mullen to deploy its capital into smaller transport providers. The company generates strong free cash flows. That should help support its growth and dividend strategy.

First Capital: A defensive TFSA stock

First Capital Real Estate Investment Trust (TSX: FCR.UN) is another great defensive dividend stock for your TFSA. A $10,000 investment in First Capital would buy 514 units for $19.44 per unit. It pays a $0.074 per unit monthly distribution that equates to a 4.6% yield. Your investment would earn $38.04 monthly, or $456.43 annually.

First Cap operates a defensive portfolio of grocery-anchored retail properties located in the heart of Canada’s top cities. The REIT has enjoyed constant rental rate growth for years due to its attractive properties and high-quality locations.

The company is pursuing a strategy to unlock shareholder value by optimizing its base of land and development assets, selling off non-core assets, and reducing debt. Even if the economy were to tighten, it is in a strong position going forward. It’s a great defensive stock for passive income in your TFSA.